California Fines Crypto Wealth Platform Nexo $500K Over 'Unlicensed' Loans
California regulators fined Nexo $500,000 for issuing over 5,400 unlicensed crypto-backed loans to state residents between 2018 and 2022. The California Department of Financial Protection and Innovation found that Nexo operated without a required license and did not properly assess borrowers’ repayment ability or creditworthiness. Nexo must also transfer all California customer funds to a licensed U.S. affiliate within 150 days. This penalty follows previous U.S. regulatory actions, including a $22.5 million multistate settlement over Nexo’s unregistered Earn Interest Product and a separate $22.5 million U.S. Securities and Exchange Commission penalty, bringing Nexo’s total 2023 fines to $45 million. Nexo has since ceased its crypto lending offerings to U.S. customers but continues similar services abroad. Experts cite the lack of borrower protections and compliance as ongoing issues, and warn that Nexo could face additional regulatory difficulties if it seeks to re-enter the U.S. market.
